10-Q 1 form10q.htm QUARTERLY REPORT

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___  to  ___.

Commission file number:  1-14323

ENTERPRISE PRODUCTS PARTNERS L.P.
(Exact Name of Registrant as Specified in Its Charter)

Delaware
 
 
76-0568219
(State or Other Jurisdiction of Incorporation or Organization)
 
 
(I.R.S. Employer Identification No.)
 
1100 Louisiana Street, 10th Floor
Houston, Texas 77002
    (Address of Principal Executive Offices, including Zip Code)
(713) 381-6500
(Registrant’s Telephone Number, including Area Code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of Each Class
Trading Symbol(s)
Name of Each Exchange On Which Registered
Common Units
EPD
New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes ☑  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes    No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer 
Accelerated filer
Non-accelerated filer   
Smaller reporting company
Emerging growth company   
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes    No  

There were 2,175,569,690 common units of Enterprise Products Partners L.P. outstanding at the close of business on October 31, 2022. 
ENTERPRISE PRODUCTS PARTNERS L.P.
TABLE OF CONTENTS

 
 
Page No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

PART I.  FINANCIAL INFORMATION.

ITEM 1.  FINANCIAL STATEMENTS.

ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)

   
September 30,
2022
   
December 31,
2021
 
ASSETS
           
Current assets:
           
Cash and cash equivalents
 
$
167
   
$
2,820
 
Restricted cash
   
88
     
145
 
Accounts receivable – trade, net of allowance for credit losses
of $55 at September 30, 2022 and $53 at December 31, 2021
   
6,704
     
6,967
 
Accounts receivable – related parties
   
29
     
21
 
Inventories (see Note 3)
   
3,173
     
2,681
 
Derivative assets (see Note 14)
   
486
     
237
 
Prepaid and other current assets
   
435
     
399
 
Total current assets
   
11,082
     
13,270
 
Property, plant and equipment, net (see Note 4)
   
44,167
     
42,088
 
Investments in unconsolidated affiliates (see Note 5)
   
2,356
     
2,428
 
Intangible assets, net (see Note 6)
   
4,010
     
3,151
 
Goodwill (see Note 6)
   
5,608
     
5,449
 
Other assets
   
1,214
     
1,140
 
Total assets
 
$
68,437
   
$
67,526
 
 
               
LIABILITIES AND EQUITY
               
Current liabilities:
               
Current maturities of debt (see Note 7)
 
$
2,654
   
$
1,400
 
Accounts payable – trade
   
754
     
632
 
Accounts payable – related parties
   
155
     
167
 
Accrued product payables
   
7,975
     
8,093
 
Accrued interest
   
219
     
453
 
Derivative liabilities (see Note 14)
   
383
     
254
 
Other current liabilities
   
757
     
626
 
Total current liabilities
   
12,897
     
11,625
 
Long-term debt (see Note 7)
   
26,548
     
28,135
 
Deferred tax liabilities (see Note 16)
   
565
     
518
 
Other long-term liabilities
   
938
     
760
 
Commitments and contingent liabilities (see Note 17)
   
     
 
Redeemable preferred limited partner interests: (see Note 8)
               
    Series A cumulative convertible preferred units (“preferred units”)
        (50,412 units outstanding at September 30, 2022 and December 31, 2021)
   
49
     
49
 
Equity: (see Note 8)
               
Partners’ equity:
               
Common limited partner interests (2,176,505,760 units issued and outstanding at
     September 30, 2022, 2,176,379,587 units issued and outstanding at December 31, 2021)
   
27,272
     
26,340
 
Treasury units, at cost
   
(1,297
)
   
(1,297
)
Accumulated other comprehensive income
   
373
     
286
 
Total partners’ equity
   
26,348
     
25,329
 
Noncontrolling interests in consolidated subsidiaries
   
1,092
     
1,110
 
Total equity
   
27,440
     
26,439
 
Total liabilities, preferred units, and equity
 
$
68,437
   
$
67,526
 


See Notes to Unaudited Condensed Consolidated Financial Statements.
ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
 (Dollars in millions, except per unit amounts)

 
 
For the Three Months
Ended September 30,
   
For the Nine Months
Ended September 30,
 
 
 
2022
   
2021
   
2022
   
2021
 
Revenues:
                       
Third parties
 
$
15,448
   
$
10,801
   
$
44,481
   
$
29,383
 
Related parties
   
20
     
31
     
55
     
54
 
Total revenues (see Note 9)
   
15,468
     
10,832
     
44,536
     
29,437
 
Costs and expenses:
                               
Operating costs and expenses:
                               
Third party and other costs
   
13,459
     
9,068
     
38,545
     
24,064
 
Related parties
   
353
     
341
     
1,005
     
965
 
Total operating costs and expenses
   
13,812
     
9,409
     
39,550
     
25,029
 
General and administrative costs:
                               
Third party and other costs
   
19
     
16
     
68
     
56
 
Related parties
   
36
     
31
     
111
     
99
 
Total general and administrative costs
   
55
     
47
     
179
     
155
 
Total costs and expenses (see Note 10)
   
13,867
     
9,456
     
39,729
     
25,184
 
Equity in income of unconsolidated affiliates
   
111
     
137
     
335
     
447
 
Operating income
   
1,712
     
1,513
     
5,142
     
4,700
 
Other income (expense):
                               
Interest expense
   
(309
)
   
(316
)
   
(937
)
   
(955
)
Interest income
   
3
     
1
     
6
     
3
 
Other, net
   
4
     
     
6
     
 
Total other expense, net
   
(302
)
   
(315
)
   
(925
)
   
(952
)
Income before income taxes
   
1,410
     
1,198
     
4,217
     
3,748
 
Provision for income taxes (see Note 16)
   
(18
)
   
(16
)
   
(54
)
   
(57
)
Net income
   
1,392
     
1,182
     
4,163
     
3,691
 
Net income attributable to noncontrolling interests
   
(31
)
   
(28
)
   
(93
)
   
(82
)
Net income attributable to preferred units
   
(1
)
   
(1
)
   
(3
)
   
(3
)
Net income attributable to common unitholders
 
$
1,360
   
$
1,153
   
$
4,067
   
$
3,606
 
 
                               
Earnings per unit: (see Note 11)
                               
Basic and diluted earnings per common unit
 
$
0.62
   
$
0.52
   
$
1.85
   
$
1.64
 













See Notes to Unaudited Condensed Consolidated Financial Statements.

ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED
COMPREHENSIVE INCOME
(Dollars in millions)

 
 
For the Three Months
Ended September 30,
   
For the Nine Months
Ended September 30,
 
 
 
2022
   
2021
   
2022
   
2021
 
 
                       
Net income
 
$
1,392
   
$
1,182
   
$
4,163
   
$
3,691
 
Other comprehensive income (loss):
                               
Cash flow hedges: (see Note 14)
                               
Commodity hedging derivative instruments:
                               
Changes in fair value of cash flow hedges
   
186
     
(100
)
   
126
     
(852
)
Reclassification of losses (gains) to net income
   
9
     
117
     
(54
)
   
634
 
Interest rate hedging derivative instruments:
                               
Changes in fair value of cash flow hedges
   
     
     
     
183
 
Reclassification of losses to net income
   
1
     
10
     
15
     
28
 
Total cash flow hedges
   
196
     
27
     
87
     
(7
)
Total other comprehensive income (loss)
   
196
     
27
     
87
     
(7
)
Comprehensive income
   
1,588
     
1,209
     
4,250
     
3,684
 
Comprehensive income attributable to noncontrolling interests
   
(31
)
   
(28
)
   
(93
)
   
(82
)
Comprehensive income attributable to preferred units
   
(1
)
   
(1
)
   
(3
)
   
(3
)
Comprehensive income attributable to common unitholders
 
$
1,556
   
$
1,180
   
$
4,154
   
$
3,599
 
  


























See Notes to Unaudited Condensed Consolidated Financial Statements.


ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(Dollars in millions)

 
 
For the Nine Months
Ended September 30,
 
 
 
2022
   
2021
 
Operating activities:
           
Net income
 
$
4,163
   
$
3,691
 
Reconciliation of net income to net cash flows provided by operating activities:
               
Depreciation and accretion
   
1,336
     
1,281
 
Amortization of intangible assets
   
132
     
113
 
Amortization of major maintenance costs for reaction-based plants
   
38
     
19
 
Other amortization expense
   
169
     
181
 
Impairment of assets other than goodwill
   
48
     
113
 
Equity in income of unconsolidated affiliates
   
(335
)
   
(447
)
Distributions received from unconsolidated affiliates attributable to earnings
   
329
     
406
 
Net losses attributable to asset sales and related matters
   
3
     
8
 
Deferred income tax expense
   
24
     
33
 
Change in fair market value of derivative instruments
   
46
     
(86
)
Non-cash expense related to long-term operating leases (see Note 17)
   
43
     
29
 
Net effect of changes in operating accounts (see Note 18)
   
(682
)
   
1,047
 
Other operating activities
   
     
(1
)
Net cash flows provided by operating activities
   
5,314
     
6,387
 
Investing activities:
               
Capital expenditures
   
(1,203
)
   
(1,806
)
Cash used for business combinations, net of cash received (See Note 12)
   
(3,204
)
   
 
Investments in unconsolidated affiliates
   
(1
)
   
(1
)
Distributions received from unconsolidated affiliates attributable to the return of capital
   
82
     
41
 
Proceeds from asset sales
   
20
     
58
 
Other investing activities
   
(3
)
   
(13
)
Cash used in investing activities
   
(4,309
)
   
(1,721
)
Financing activities:
               
Borrowings under debt agreements
   
64,482
     
11,159
 
Repayments of debt
   
(64,828
)
   
(11,492
)
Debt issuance costs
   
(1
)
   
(15
)
Monetization of interest rate derivative instruments
   
     
75
 
Cash distributions paid to common unitholders (see Note 8)
   
(3,061
)
   
(2,948
)
Cash payments made in connection with distribution equivalent rights
   
(26
)
   
(23
)
Cash distributions paid to noncontrolling interests
   
(115
)
   
(115
)
Cash contributions from noncontrolling interests
   
4
     
23
 
Repurchase of common units under 2019 Buyback Program
   
(107
)
   
(89
)
Other financing activities
   
(63
)
   
(41
)
Cash used in financing activities
   
(3,715
)
   
(3,466
)
Net change in cash and cash equivalents, including restricted cash
   
(2,710
)
   
1,200
 
Cash and cash equivalents, including restricted cash, at beginning of period
   
2,965
     
1,158
 
Cash and cash equivalents, including restricted cash, at end of period
 
$
255
   
$
2,358
 









See Notes to Unaudited Condensed Consolidated Financial Statements.

ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED EQUITY
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022
(Dollars in millions)

 
 
Partners’ Equity
             
   
Common
Limited
Partner
Interests
   
Treasury
Units
   
Accumulated
Other
Comprehensive
Income (Loss)
   
Noncontrolling
Interests in
Consolidated
Subsidiaries
   
Total
 
For the Three Months Ended September 30, 2022:
                             
     Balance June 30, 2022
 
$
27,003
   
$
(1,297
)
 
$
177
   
$
1,094
   
$
26,977
 
   Net income
   
1,360
     
     
     
31
     
1,391
 
   Cash distributions paid to common unitholders
   
(1,035
)
   
     
     
     
(1,035
)
   Cash payments made in connection with
      distribution equivalent rights
   
(9
)
   
     
     
     
(9
)
   Cash distributions paid to noncontrolling interests
   
     
     
     
(33
)
   
(33
)
   Amortization of fair value of equity-based awards
   
39
     
     
     
     
39
 
   Repurchase and cancellation of common units under
      2019 Buyback Program
   
(72
)
   
     
     
     
(72
)
   Cash flow hedges
   
     
     
196
     
     
196
 
   Other, net
   
(14
)
   
     
     
     
(14
)
     Balance, September 30, 2022
 
$
27,272
   
$
(1,297
)
 
$
373
   
$
1,092
   
$
27,440
 



 
 
Partners’ Equity
             
   
Common
Limited
Partner
Interests
   
Treasury
Units
   
Accumulated
Other
Comprehensive
Income (Loss)
   
Noncontrolling
Interests in
Consolidated
Subsidiaries
   
Total
 
For the Nine Months Ended September 30, 2022:
                             
     Balance, December 31, 2021
 
$
26,340
   
$
(1,297
)
 
$
286
   
$
1,110
   
$
26,439
 
   Net income
   
4,067
     
     
     
93
     
4,160
 
   Cash distributions paid to common unitholders
   
(3,061
)
   
     
     
     
(3,061
)
   Cash payments made in connection with
      distribution equivalent rights
   
(26
)
   
     
     
     
(26
)
   Cash distributions paid to noncontrolling interests
   
     
     
     
(115
)
   
(115
)
   Cash contributions from noncontrolling interests
   
     
     
     
4
     
4
 
   Amortization of fair value of equity-based awards
   
118
     
     
     
     
118
 
   Repurchase and cancellation of common units under
      2019 Buyback Program
   
(107
)
   
     
     
     
(107
)
   Cash flow hedges
   
     
     
87
     
     
87
 
   Other, net
   
(59
)
   
     
     
     
(59
)
     Balance, September 30, 2022
 
$
27,272
   
$
(1,297
)
 
$
373
   
$
1,092
   
$
27,440
 














See Notes to Unaudited Condensed Consolidated Financial Statements.  For information regarding Unit History and
Accumulated Other Comprehensive Income (Loss), see Note 8.
ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED EQUITY
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021
(Dollars in millions)

 
 
Partners’ Equity
             
   
Common
Limited
Partner
Interests
   
Treasury
Units
   
Accumulated
Other
Comprehensive
Income (Loss)
   
Noncontrolling
Interests in
Consolidated
Subsidiaries
   
Total
 
For the Three Months Ended September 30, 2021:
                             
     Balance, June 30, 2021
 
$
26,269
   
$
(1,297
)
 
$
(199
)
 
$
1,074
   
$
25,847
 
   Net income
   
1,153
     
     
     
28
     
1,181
 
   Cash distributions paid to common unitholders
   
(983
)
   
     
     
     
(983
)
   Cash payments made in connection with
      distribution equivalent rights
   
(8
)
   
     
     
     
(8
)
   Cash distributions paid to noncontrolling interests
   
     
     
     
(44
)
   
(44
)
   Cash contributions from noncontrolling interests
   
     
     
     
5
     
5
 
   Amortization of fair value of equity-based awards
   
36
     
     
     
     
36
 
   Repurchase and cancellation of common units under
      2019 Buyback Program
   
(75
)
   
     
     
     
(75
)
   Cash flow hedges
   
     
     
27
     
     
27
 
   Other, net
   
(2
)
   
     
     
     
(2
)
     Balance, September 30, 2021
 
$
26,390
   
$
(1,297
)
 
$
(172
)
 
$
1,063
   
$
25,984
 



 
 
Partners’ Equity
             
   
Common
Limited
Partner
Interests
   
Treasury
Units
   
Accumulated
Other
Comprehensive
Income (Loss)
   
Noncontrolling
Interests in
Consolidated
Subsidiaries
   
Total
 
For the Nine Months Ended September 30, 2021:
                             
     Balance, December 31, 2020
 
$
25,767
   
$
(1,297
)
 
$
(165
)
 
$
1,073
   
$
25,378
 
   Net income
   
3,606
     
     
     
82
     
3,688
 
   Cash distributions paid to common unitholders
   
(2,948
)
   
     
     
     
(2,948
)
   Cash payments made in connection with
      distribution equivalent rights
   
(23
)
   
     
     
     
(23
)
   Cash distributions paid to noncontrolling interests
   
     
     
     
(115
)
   
(115
)
   Cash contributions from noncontrolling interests
   
     
     
     
23
     
23
 
   Amortization of fair value of equity-based awards
   
115
     
     
     
     
115
 
   Repurchase and cancellation of common units under
      2019 Buyback Program
   
(89
)
   
     
     
     
(89
)
   Cash flow hedges
   
     
     
(7
)
   
     
(7
)
   Other, net
   
(38
)
   
     
     
     
(38
)
     Balance, September 30, 2021
 
$
26,390
   
$
(1,297
)
 
$
(172
)
 
$
1,063
   
$
25,984
 








See Notes to Unaudited Condensed Consolidated Financial Statements. For information regarding Unit History and
Accumulated Other Comprehensive Income (Loss), see Note 8.
7


ENTERPRISE PRODUCTS PARTNERS L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

KEY REFERENCES USED IN THESE
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unless the context requires otherwise, references to “we,” “us” or “our” within these Notes to Unaudited Condensed Consolidated Financial Statements are intended to mean the business and operations of Enterprise Products Partners L.P. and its consolidated subsidiaries.